Personal Insurance

Personal Insurance
Assignment 5 Exercises

Personal Insurance, 2nd Edition, Edited by Mary Ann Cook; ISBN: 978-0-89463-488-8

Chapter 9

Directions and Information: Please read very, very carefully.

 As soon as you download this document from Doc Sharing, re-save it to your desktop or any other location you wish, using Word’s “Save

As” feature. Name the file: Your Name-HW-WK5-BUS16.
 Caution: If you don’t use the correct file name, I will not be able to find your assignment and it will not be graded.
 Type your answers under each question. Your answer can be any length and don’t have to fit into the space allotted.
 Your answer to each question must be detailed and written in complete sentences, using proper English grammar and correct spelling.
 Please do not put your answers in another document. This sheet is the only acceptable format.
 When you’re finished with the assignment, submit the entire document, including instructions, to the eCollege Dropbox basket labeled

Assignment 5. Instructions for using the Dropbox are under “Course Home.”

Chapter 9 Case Application Question

Will, age thirty-three, and Erin, age thirty-one, are a newly married couple. Will is an assistant manager at a national electronics chain

store and earns $24,000 a year. Erin is a web application developer earning $53,000 annual. They own a condominium valued at $285,000, which

has an outstanding mortgage of $231,000. They have two vehicles and $34000 in car loans, as well as combined outstanding college loans of

$126,000. They also have $12,000 in credit card debt, arising mostly from their recent wedding and honeymoon expenses.

Will’s employer does not offer any retirement savings plan or other benefits, and, because of his and Erin’s current debt, Will is unable to put

any savings into a retirement account. Erin has been with the same employer for six years and has been contributing to a 401(k) for five years.

Her employer does not provide any matching contributions for the employer-sponsored defined contribution plan. The current value of Erin’s

401(k) is $17,000, including investment returns. Erin’s employer provides group universal life (GUL) coverage for her in the amount of $50,000.

The couple has no personal savings, and any excess money goes to paying down their outstanding debts.

Will and Erin have been considering whether to purchase life insurance, although they are concerned about the costs. They have decided to

consult with a local agent to learn more about life insurance products and what their current life insurance needs would be. The agent advises

the couple that she will be using the needs approach to evaluate their current financial situation, economic needs and available resources to

meet expenses in the event of their premature death.

The first step in this process is to determine the couple’s cash needs in the event of either Will’s or Erin’s premature death.

Final Expense Needs
Funeral costs $ 8,000
Estate settlement 5,000
Federal taxes 0
State taxes 0
Total final expenses $ 13,000

Debt Elimination Needs
Satisfy outstanding mortgage(s) $ 231,000
Eliminate outstanding credit card debt 12,000
Eliminate college loans 126,000
Eliminate outstanding car loans 34,000
Total debt elimination needs $ 403,000

Family’s Living Expenses Needs
Household maintenance expenses $ 82,000
Other living expenses 125,000
Total living expenses needs 207,000

Total Expense Needs $ 623,000

Based on a review of the couple’s current financial situation, the agent determines total expense needs of $623,000. The agent further decides

to include an emergency fund in the amount of $15,000 to cover any unanticipated expenses following the premature death of either Will or Erin.

Although the couple is still relatively young and early in their working careers, the agent will also include an amount for future retirement

income funding. The calculation for the amount of retirement income would be based on age, Erin’s employer-sponsored retirement plan, and

available Social Security benefits at retirement age. In the case, the agent will use an amount of $250,000 each for Will and Erin.

The only assets that the couple currently has available are Erin’s $50,000 GUL and her $17,000 retirement account, for which Will is listed as

the beneficiary. Neither individual would receive survivor’s benefits from Social Security until they reach retirement age. Future life

insurance reviews may reflect such benefits as the couple’s financial and family situation changes over time.

a. Calculate the total life insurance needs for Will.

b. Calculate the total life insurance needs for Erin.

Personal Insurance
General Course Information: 8-Weeks session: Monday, April 18 – Friday, June 10
BUS 16 – (Personal Insurance) – Section 4065 – 3 Units – Transfer: CSU
Instructor Information:
Website address: (Login date is Monday April 18)

Hybrid Design: Business 16 has both on line and in class room segments. The class will meet in Room 106 on Wednesday evenings from 630 to 950

pm starting on Wednesday April 20. Assignments each week will become

Office Hours: Office Hours on Skype (edcombs1740) are Monday, Wednesday and Friday 3 to 345 pm. In person at Part Timers office B150 from 6 to

630 pm Wednesday evening before the start of Business 16 beginning Wednesday, April 27.

 Virtual Office Hours (CyberRoom): You can reach the instructor virtually through the CyberRoom. Keep in mind that your classmates can see

what you write in the CyberRoom so it is not an appropriate place to post any questions related to your exams, class projects, grades, or

personal questions.
 E-mail Responses: If you need to contact the instructor directly to address any personal matters such as grade questions, exam questions,

test questions, class project questions, or individual personal questions, use the following e-mail address to contact the instructor:
Warning: Your instructor will respond to emails and CyberRoom posts as quickly as possible, but certainly within 48 hours. Response times will

be shorter during the week as opposed to weekends and holidays.

Prerequisites: (You must have this prerequisite to be in this class)

Skills Required:
Before beginning this course, you are expected to:
• have the skills to read and understand English
• comprehend complex concepts
• have an excellent work ethic and be self-disciplined
• know how to attach files to email and other programs
• be able to use Microsoft Word

Course Description
In this course, students will learn the essentials of personal insurance coverages. Personal property and liability topics will include

automobile, homeowners, and other residential insurance, such as earthquake, flood, inland marine and miscellaneous coverages. The basics of

financial planning, life insurance and health insurance will also be covered.

Arrange at least 5 to 10-hours per week to work on this class.

Course Objectives:
Upon completion of this course the student will be able to:
Discuss personal and family loss exposures and types of personal insurance policies;
Explain the problems and challenges associated with personal auto insurance, such as no-fault insurance, high-risk drivers and compensation

of victims;
Explain the principals of rating of automobile insurance;
Discuss the regulation of personal auto insurance;
Identify the parts of an automobile policy, including liability, medical payments, collision, comprehensive and uninsured motorist coverages

and personal automobile policy conditions;
Evaluate homeowners insurance as it relates to policy variations, endorsements and ratings;
Explain residential insurance as it relates to disasters such as earthquakes, floods, fires and other residential insurance policies, such as

marine floaters, watercraft policies and umbrella liability policies;
Discuss financial planning as it impacts personal loss, social security, retirement plans and annuities;
Explain the need for life insurance and the various types of life insurance that are available;
Discuss health care problems in the United States, the need for health and disability insurance and coverage options such as major medical,

dental, long-term care, disability, etc.

Student Learning Outcomes:

1. Given a case about a commercial property loss, the student will be able to explain whether coverage applies and determine the amount,

if any, the insurer will pay for the loss.
2. Given a profile of a business, the student will be able to recommend appropriate Commercial Property coverage. As assessed by: Final


Required Textbooks, Software and additional Materials:

Personal Insurance, 2nd Edition, Edited by Mary Ann Cook; ISBN: 978-0-89463-488-8
Mandatory Requirements
In order to take this course on-line you must have:
• a reliable PC or MAC
• a reliable Internet connection
• the minimum hardware configuration listed at the web site: . An up to date Web Browser – Internet Explorer

8.0 or 9.0 are preferred. Firefox and Safari are also acceptable, but IE usually works the best with eCompanion. Note that Google Chrome will

not work with eCompanion.
• Microsoft Word (any version.) If you’re using a MAC, make sure you have Microsoft Word on it as. you will be using Word for your


Course Requirements:
1. Distance education courses (or online classes) are offered for students who are on the run and have busy schedules; therefore, you need

to have your Internet connection at all times to take any of these courses. Students are responsible to have access to a working computer at

all times including those times when a student is going on a business trip, business trainings or conferences, or other personal emergencies.

NO EXCEPTIONS. It is a student responsibility to find a working computer if his/her computer experiences a problem. In case of emergencies,

there are several places where students could go to take their exams and complete their homework assignments: public libraries, their work

place, Kinkos. If you have a computer but you lost your internet connection, you can always go to McDonalds, Starbucks, and other places that

provide free internet connection.
2. Continuous participation is important to the success of this class. The instructor reserves the right to drop any student who fails to

complete assignments. Active participation is confirmed by completion of homework assignments, exams, as well as the time spent working on the

Web site. Finally, it is the student’s responsibility to drop their own classes within the SMC established due dates if they feel that they

cannot finish the class.
3. Students are expected to accommodate their school responsibilities to their personal schedule NOT the other way around. Students are

responsible to login to the class web site every Monday to view the list of the activities that must be completed and done during the week.

This is not a weekend class OR a self-paced class; therefore, the instructor expects each student to follow course deadlines.
4. Students are required to read and study any additional material posted on the class Web site each week.
5. Students are responsible to follow the deadlines posted on the class Web site including any changes announced by the instructor.

Students are required to comply with the exams, homework and other assignments deadlines.
6. It is important that you submit your complete and correct assignments files in the correct dropbox. If the instructor can’t find your

work he can’t grade it. I will be diligent in looking for what you submit, but ultimately it is the student responsibility to place the files

in the correct dropbox basket.
7. Students must work alone when completing their own assignments, projects, and exams. Students that are caught cheating in this class

may be sent to disciplinary action and will be asked to take all the exams on campus. No exceptions.
8. If you need any assistance with your homework assignment, you are welcome to use the CyberRoom section to post questions. In addition,

students are welcome to participate by posting feedback to other students on the CyberRoom. The instructor will also be answering any questions

related to your homework assignments or class lectures in the CyberRoom. However, if one of your classmates answered your questions correctly,

the instructor will not provide any additional information unless it is needed for clarification.
9. When you take your exam and class projects, you will not be allowed to post any question on the CyberRoom section. If you have

questions about your exams, theory exams, and class projects, submit them via e-mail.
10. Your instructor is happy to make special accommodations for Students with disabilities. Students with disabilities who require special

accommodations should visit the disabled student services center before classes start or within the first week to complete the necessary forms

for special accommodations.
11. Students are responsible to use the mandatory school e-mail account to correspond with SMC instructors. Instructor replies will always

use the school e-mail account.

Attendance Policy:
Since participation is essential for normal progress in a class, a student is expected to have active participation by providing assigned

homework assignments for this class on a weekly basis. The responsibility to withdraw from a class rests with the student wishing to withdraw.

Failure to submit a withdrawal notice to the Admissions Office could result in a grade of “F” for the class along with a requirement to pay

certain enrollment fees.
The instructor may drop students who have missed substantial amounts of homework assignments at any time during the semester. If the instructor

already dropped you from the class and the deadline to reinstate already passed, you will have to repeat the class over again. But even though

your instructor reserves the right to drop students in certain circumstances withdrawal processing is ultimately a student responsibility.

Professional Communication: (between students and instructor)

Cordial and respectful behavior is fundamental to a well-functioning classroom whether physical or virtual. Students must uphold recognized

standards of professional communication with instructors and classmates at all times. Although situations are quite rare students that

misbehave, insult others, or become disruptive may be referred for disciplinary action.

Students with Disabilities:
As noted before your instructor is happy to make special accommodations for Students with disabilities. Students with disabilities who require

special accommodations should visit the disabled student services center before classes start or within the first week to complete the necessary

forms for special accommodations.

Method of Instruction:
Lectures: Important material from the text and other resources will be covered in this class. Read the chapter before class each

Wednesday evening. The in class session provides your best opportunity to ask questions when you have them. Students are responsible to read

any additional material posted on the Web site as well as listen to audio presentations posted on the Web site.
Weekly Assignments:
Board Assignments
Every week, you will be asked to participate in a specific class discussion topic. You are required to post your feedback before the end of

each week. The last day to submit your board discussion will be every Sunday night before 11:59 p.m.

There will be theory quizzes (multiple choice questions, true and false questions, etc.) worth 10-points each. You will be tested on the class

lecture and class material that is being covered each week.

Homework Assignments
• Case problems and outside readings will be periodically assigned to help support and supplement material found in the text. You are

required to read the HW Assignment section each week to find out what is what you need to complete during that week. On some occasions you will

find notes or warning about the homework assignment in that section. It is important that you read this section at all times before submitting

your homework assignment. Students need to apply the proper features covered in the class lecture to earn credit. If you do not apply the

features as presented, you will not get credit.
• If your assignment requires that you use special files to complete your homework assignment, those files can be found under the Doc

Sharing section of the Web site. Use the files that have been uploaded on the class website when you are completing your assignments. Students

are expected to complete all homework assignments by the due date listed on the syllabus (Sunday of each week). You must have all the

assignments submitted in by 11:59p.m. if you don’t finish all assignment files just submit what you have completed before the due date..
• Your assignment must be submitted using the proper basket using the Dropbox feature.
• Once again, students are expected to work on their own when they are doing their homework assignments. Don’t share your files with

• Keeping Records: You are required to keep records of all homework assignment files, class projects or exams until your grades have

posted officially by Admissions and Records.
• Students are required to use Word for this class. If you are using MAC, make sure to use Word for Mac. The instructor will not accept

any other format. If the instructor cannot open a file I may send it back to you and request that you resubmit it. I really want to give you

credit for all of your work, but ultimately it is your responsibility to provide me with a file I can review.
Can I submit late assignments?

YES, except for the last homework assignment. There is no extension for the last homework assignment. In addition, extra credit assignments, if

any, must be submitted by their due date there is NO extension on extra credits assignments.

How late can I submit my assignments?
• You have ONE full week from the original due date to submit your late homework assignments (except for extra credits and the last

homework assignment of the semester). You need to submit the assignment on Sunday before 11:59 p.m.
• I will not accept any assignments more than ONE week late. No homework assignment will be accepted after Sunday, June 5.
Will I lose points if an assignment is late?
Your instructor will deduct at least one point (but not more than an amount equal to 20% of the total grade for that assignment, e.g. an

exercise worth 10 points will have a deduction for late submission of no more than 2 points). But the instructor will not accept a first

submission of an assignment that is more than one week after its stated due date.
Use Dropbox to submit your homework assignment, exams, and class projects:
• Your dropbox is attached to the gradebook; therefore, if you do not submit the homework files in the proper dropbox, you may not

receive any credit. It is my goal to give credit for everything you submit. I will make a sincere effort to find a misplaced submission, but

ultimately it is the student’s responsibility to put the file in the right place, not the instructor’s responsibility to find it.
• If you are near a due date/time and dropbox will not accept your submission send the instructor the files via e-mail. It will prove

the timeliness of your submission. However, when dropbox becomes available, please submit your files to dropbox I would appreciate an email

from you when you have completed this process.
• There are NO extensions on the due dates for the last homework assignments that are due on Week 7. Therefore, your files have to be

on the dropbox by the due date.
• You will NOT be able to delete any files you submit on the dropbox at any time. Therefore, if you submit the files on the wrong

dropbox just go ahead and resubmit the files in the CORRECT dropbox. The instructor will ignore your first submissions when the instructor

finds the other files on the incorrect dropbox.
Important Information: This class uses Pacific Daylight Time for all due dates and times regardless where you are in the world.

Exams and Class Project Information:

Be advised that no one can take these exams outside the schedule date. Students are required to arrange their personal schedules around their

class schedule.

Midterm Exam (Theory): There will be one midterm. This exam will be opened on a given date at a specific time. You midterm exam will be

similar to your quizzes. It is your responsibility to leave sufficient time to complete your exams and to finish the exams before the due time.

What happens if you miss the midterm?

For students who do not take the midterm exam, contact the instructor no later than three daysafter the exam due date to reschedule a makeup

exam. No makeup exams will be given on weekends. In addition, you will be given only ONE day to make up the midterm exam. The instructor will

give you the data and time of the makeup exam.
Will I get penalties for taking a midterm exam even if I had an emergency? Possibly it depends on the situation, but any penalty will not

exceed 20% of the total points on the exam.
Final Exam (Theory): The final exam will be given during the week beginning June 6. Your official last day of classes is June 10. You should

be aware that class project, exams, and extra credits will NOT be allowed beyond this day. In addition, be aware that the Web site will close

exactly at 10:59pm on Friday, June 10 at night.
What happen if you miss the final exam? There are NO makeup exams or date extension on thefinal exam.
Can I apply for an incomplete on this class? Yes, but only if you qualify. If you need to get anincomplete due to a Serious Emergency contact

the instructor immediately. SMC has guidelines for these situations. Your instructor’s understanding is that the incomplete must be filed by

the final exam date or within three days after the final exam date.
In addition, “Incompletes” are given to those eligible students that are missing any part of the final exam week. No incompletes are given to

students that are missing other weeks of school work assignments. Those students are required to retake the course.

Method of Evaluation:
• Grading of Homework Assignments, Board Assignments, and Exams:
• No grades will be given if you submit the incorrect homework assignment files. Also, there are some assignments that are not going to

be accepted if you submit them incomplete;
• Assignments are worth about 15-points each;
• If you submit your late assignment within a week of the assignment’s due date or you have been asked to redo a specific assignment,

your instructor will be as prompt as possible in grading but it may take longer than normal;
• Total points will be computed as follows:

Grading Activities Points
Homework Assignments 105 Scale:
Discussion Board (7) – (5-points each) 35 Percent Grade
Weekly Quizzes 60 90-100% A
Midterm Exam 50 80-89% B
Final Exam 50 70-79% C
60-69% D
Total 300 0-59% F